The Federal Reserve may delay its anticipated interest rate cut as inflation readings fall short of expectations. Traders are currently betting on a rate cut in June or July, depending on economic data. Stubborn price pressures in housing and services are keeping the Fed cautious, with rents decreasing but not yet impacting inflation gauges. The Fed’s preferred inflation measure, the Personal Consumption Expenditures price index, also shows services prices remaining high.
Despite pressure from politicians, including US Senator Elizabeth Warren and President Donald Trump, the Fed remains focused on data-driven decision-making. The Fed’s mandate is to prioritize economic factors over political influences, and Chair Jerome Powell has emphasized the importance of making decisions based on what is best for the economy.
In other news, the National Association of Realtors has settled antitrust lawsuits by agreeing to pay damages and eliminate rules on commissions, which is expected to lower the cost of buying and selling homes. This move is set to disrupt the current homebuying and selling business model, potentially reducing real estate commissions by 25% to 50%.